Appellate judge joins Boeing as top lawyer

Boeing Co. said Wednesday that it has hired prominent federal appeals court Judge J. Michael Luttig to be its top in-house lawyer, an unconventional choice for the aerospace giant, which is seeking to restore its reputation after high-profile ethics scandals.

Luttig, once on the short list for a nomination to the Supreme Court, will succeed Douglas Bain as senior vice president and general counsel. Bain plans to retire on July 1 after 24 years with the company. He spent the last six as general counsel.

In his resignation letter to President Bush on Wednesday, Luttig said the Boeing job was a "singular opportunity" and that he felt he was staying within the realm of public service by moving to work for an "American icon."

Bain's departure comes as the company is negotiating a comprehensive settlement of two federal criminal investigations into its defense business. Boeing may end up paying a fine as large as $500 million to resolve allegations that it improperly acquired proprietary documents from rival Lockheed Martin Corp. and illegally recruited a senior Air Force official while she still had oversight of billions of dollars in other Boeing contracts.

Such a fine would be one of the biggest financial penalties ever levied on a U.S. company for misconduct. Boeing Chief Financial Officer James Bell said last month that the company was working with federal authorities on those matters but denied press reports that a settlement was imminent.

Boeing spokesman John Dern said Bain, 57, is leaving voluntarily after expressing the desire to step down as early as last year. Bain's exit is not connected to the lack of a settlement after several months of negotiations, Dern said.

Indeed, some said settlement talks are far enough along that they could be completed by the time Bain leaves. He will continue to lead the company's team of lawyers negotiating with the Justice Department until his departure, Dern said.

After Boeing moved its headquarters to Chicago in 2001, Bain kept his home in Seattle, where his family still resides. He has two stepdaughters and a son from a previous marriage. A source close to Bain said he is devoted to his family, flying home every weekend.

"He's been general counsel for six years during an intense time, and he decided to step back from the rigors of life as a general counsel," Dern said.

Bain's tenure was marked by a litany of legal and regulatory woes that cost two chief executives their jobs and resulted in a prison term for a chief financial officer.

Bain did not mince words when he described the consequences of the unethical conduct at a Boeing leadership retreat in January.

"There are some within the prosecutors' offices that believe Boeing is rotten to the core," he said, according to a copy of the speech leaked to the media. "They talk to us about pervasive misconduct and they describe it in geographic terms of spanning Cape Canaveral to Huntington Beach to Orlando to St. Louis to Chicago."

The candid assessment was backed by Chairman and Chief Executive James McNerney, who has made restoring Boeing's image one of his priorities.

Since taking over in July, McNerney gradually has turned over the company's management team, including replacing Boeing's chief lobbyist in Washington. Luttig is his first significant hire from outside the company. It was a bold move, legal experts said, considering Luttig has never worked inside a corporate legal department.

But given past misconduct, "you want someone as clean as they come to represent the company," said Robin Sparkman, editor in chief of Corporate Counsel magazine. "Luttig is one of the few people who has already been vetted. You can hire him and know he's going to be Mr. Clean."

Luttig, 51, served for 15 years on the Richmond, Va.-based U.S. Court of Appeals for the 4th Circuit, where his legal reasoning and analytical skills have made him a vanguard of the conservative intellectual movement.

He has long been considered one of the leading contenders for a Supreme Court seat in a Republican administration. President Bush interviewed him for the job last summer, before selecting Chief Justice John Roberts and Justice Samuel Alito.

Luttig said in a telephone interview that he had not been looking to leave the appeals court, but that the opportunity at Boeing was too good to pass up. He said it had nothing to do with his Supreme Court prospects, which had dimmed after Bush opted for the less controversial Roberts and Alito.

"No one can or should plan his life around the possibility of a Supreme Court appointment," Luttig said. "And my decision has nothing whatever to do with the Supreme Court process."